Joel Schwartz

The International Monetary Fund (IMF) recently published a report urging the world’s governments to “reform” energy subsidies estimated at $1.9 trillion in 2011. Eliminating government policies designed to rig markets in favor of particular energy companies or industries is a worthy goal. Unfortunately, that’s not the agenda the IMF is pushing.

The IMF seeks to shame U.S. policymakers into enacting carbon and coal taxes by redefining the absence of such taxes as energy subsidies. The IMF’s rationale goes like this. Market prices do not reflect the harms (“negative externalities”) fossil fuels do to public health and the environment. Consequently, fossil fuels are under-priced and society consumes too much of them. Policymakers should enact corrective (“Pigou”) taxes to “internalize the externalities” (make polluters pay) and reduce consumption to “efficient” levels.

The IMF estimates that, by not imposing corrective taxes, the U.S. subsidizes fossil fuels to the tune of $502 billion annually, making America the world’s biggest energy subsdizer!

This is blackboard economics (the pretense of perfect information and flawless policy design and implementation) in the service of a partisan agenda.

Carbon taxers disclaim any intent to pick energy-market winners and losers, but that is in fact the core function of a carbon tax. As with cap-and-trade, the policy objective is to handicap fossil energy and, thereby, “finally make renewable energy the profitable kind of energy in America,” as President Obama put it.

This week at MasterResource.Org, I offer skeptical commentary on the “IMF’s Carbon TaxShenanigans.” Here is a summary of key points (including two shrewd comments posted by Heritage Foundation economist David Kreutzer). [click to continue…]

The American Lung Association (ALA) is hawking the results of an opinion poll that supposedly shows “American voters support the U.S. Environmental Protection Agency (EPA) setting stronger fine particle (soot) standards to protect public health.” ALA spokesperson Peter Iwanowicz says the poll “affirms that the public is sick of soot and wants EPA to set more protective standards.” Missy Egelsky of pollster Greenberg Quinlan Rosner says the survey “clearly indicates that Americans strongly back the EPA taking action now to limit the amount of soot released by oil refineries, power plants and other industrial facilities” (Greenwire, Nov. 29, 2012). This is all spin.

Most Americans probably have opinions about President Obama’s overall record and many have opinions about the Stimulus, Obamacare, the Keystone XL Pipeline, the wars in Iraq and Afghanistan, the auto industry bailout, and whether Congress should cut spending and/or raise taxes. But how many even know the EPA is revising the national ambient air quality standard (NAAQS) for fine particles (PM2.5)?

So the first thing I notice in the Greenberg Quinlan Rosner poll is the absence of an appropriate first question: Please name or describe any major air quality rules the U.S. EPA is expected to complete in the near future? Starting with that question would likely show most people are unaware of the pending NAAQS revision. From which it follows they don’t have an opinion about it (though of course anyone can have an off-the-cuff reaction to anything).

The survey asks a bunch of demographic questions about respondents’ party affiliation, age, gender, and the like, but only two substantive questions. The first is as follows:

As you may know, the EPA is proposing to update air pollution standards by placing stricter limits on the amount of fine particles, also called “soot,” that power plants, oil refineries and other industrial facilities can release. Do you favor or oppose the EPA setting stricter limits on fine particles, also called “soot?”

Of total respondents, 63% were in favor, 30% were opposed. So according to the ALA, the public supports tougher standards by 2 to 1. But since most respondents have probably never heard or thought about the issue until that moment, the results simply confirm what everybody already knows: Most people think air pollution is a bad thing and would prefer to have less of it.

Since what the question elicits from most respondents is their general attitude about air pollution, it is remarkable that 30% answered in the negative. Note too that most of what the public hears about air pollution comes from organizations like the EPA and the ALA, which relentlessly exaggerate air pollution levels and the associated health risks. [click to continue…]

Although five years old, Air Quality in America is as relevant as ever. As public susceptibility to global warming alarmism has waned, EPA and its allies in the war on affordable energy rely increasingly on old-fashioned air pollution alarmism to sell their agenda.

You can still buy Air Quality in America from Amazon.Com. However, AEI no longer maintains a PDF version on its Web site. Because I make frequent use of the book, and want readers to be able to check my sources, I am posting a PDF copy on GlobalWarming.Org.

A recent study by the Manufacturer’s Alliance/MAPI finds that EPA’s proposed revision of the “primary” (health-based) national ambient air quality standard (NAAQS) for ozone would have devastating economic impacts, such as:

Impose $1 trillion in annual compliance burdens on the economy between 2020 and 2030.

Reduce employment by 7.3 million jobs in 2020 (a figure equal to 4.3% of the projected labor force in 2020).

In a companion report, the Senate Republican Policy Committee estimates the job losses and “energy tax” burden (compliance cost + GDP reduction) each State will incur if EPA picks the most stringent ozone standard it is considering.

So let’s see — we have emission regulations that function as de-facto energy taxes, and the costs far outweigh the putative benefits. Sound familiar? The resemblance to Waxman-Markey is more than superficial, because if stringent enough, air pollution regulations can restrict fossil energy use no less than carbon taxes or greenhouse cap-and-trade schemes.

For more information on EPA’s proposed ozone NAAQS and the MAPI study, see my post today on CEI’s Open Market.Org.